On behalf of the Minister for Justice, Deputy Helen McEntee, I thank Deputy Naughten for introducing the Bill on behalf of the Regional Group of Deputies.
Insurance reform is a key priority for the Government. This is reflected in the programme for Government, in the Government's action plan for insurance reform, which was launched last December, and in the Justice Plan 2021, which the Minister, Deputy McEntee, published recently.
I very much appreciate that the objective of the Bill is to deal with the issue of fraudulent actions, and particularly as it arises in cases which may come to be dismissed under the specific terms of section 26 of the Civil Liability and Courts Act 2004. I wish to state that the Government has decided not to oppose the Bill at this Stage but notes that substantial amendments will be required to it. The Government also notes that it has already committed in its action plan on insurance reform to review the issues raised by the Bill, and work is under way in this regard.
The Government's action plan for insurance reform sets out 66 actions designed to: bring down costs for consumers and businesses; introduce more competition into the market; prevent fraud; and reduce the burden on business, community and voluntary organisations. The action plan includes actions to be taken by a number of Departments and implementation of the plan is being overseen by the Cabinet committee on economic recovery and investment’s sub-group.
The Government recognises that there is a challenge with awards and claims inflation in the insurance sector, along with the premium inflation that comes from them. At the same time, certain areas of risk are being avoided, in the commercial sense, across the sector and this is disadvantageous to both vulnerable business and other types consumers.
Orders for costs are a major issue. Section 2(a) of the Bill addresses amendments to section 26 of the Civil Liability and Courts Act 2004. Section 26 of the 2004 Act provides that a court shall dismiss a plaintiff's personal injuries action in circumstances where the plaintiff or another person knowingly engages in the giving of false or misleading evidence unless the dismissal of the action would result in an injustice being done. This amendment would require the court, where it so dismisses an action, to also make an order that the plaintiff shall pay the legal costs of the defendant, unless this would result in an injustice being done. As Deputies will be aware, however, section 26 of the Civil Liability and Courts Act 2004 deals with the issue of case dismissal on the basis of false or misleading evidence given in a personal injuries action. It does this both in regard to the relevant proceedings and to any affidavit sworn in support of those proceedings under section 14 of the Act. The section provides that the court shall dismiss an action in such circumstances "unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done".
When considering section 26 of the 2004 Act, it should also be noted that it needs to be read in conjunction with section 25 of the same Act. Section 25 already makes it an offence to give or adduce false or misleading evidence in personal injuries cases. It also makes it an offence to give, or dishonestly cause to be given, an instruction or information to a solicitor or a person acting on behalf of a solicitor or an expert in regard to a personal injuries action. For the purposes of section 25, the act is done dishonestly if the person does it with the intention of misleading the court. It is clear, therefore, that the avoidance of an injustice already runs to the root of section 26 as it currently stands and is implemented and, to that degree, it is already aligned with the Bill.
The view taken by the Government is that the Bill is, to some degree, a restatement of what is already happening in relation to costs before the court in personal injuries cases. The Bill would impose a requirement on the courts to make orders for costs, despite this being a matter for which there is some existing judicial discretion and existing legislative basis. I remind the House that under the long-standing principle that costs follow the event, the courts already have the power to award costs and have done so against a plaintiff at the discretion of the judge in many cases.
A further important consideration is that Part 11, sections 168 and 169, of the Legal Services Regulation Act 2015 was commenced in October 2019. Under section 168 of the 2015 Act a court now has the power to order that a party to a proceedings pay the costs of, or incidental to, the proceedings of one or more other parties to the proceedings. The order may relate to, for example, part of the costs, costs incurred between specific dates, costs incurred for particular parts or steps in the proceedings, and costs relating to successful elements of the proceedings. Section 169 of the 2015 Act gives effect to the principle of costs following the event. It states that a party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful in those proceedings, unless the court orders otherwise, having regard to the particular nature and circumstances of the case, and the conduct of the proceedings by the parties. The effect of the commencement of Part 11 is that the principle that costs follow the event was strengthened significantly and given legislative authority. I believe that, as currently drafted, section 2(a) of this Bill runs the risk of impinging on existing legislation.
Section 2(b) of the proposed amendment makes provision for the courts at their discretion to refer cases that have been dismissed under section 26 or the Civility Liability and Courts Act to the Office of the Director of Public Prosecutions. While it has been the case that judges on occasion have ordered matters to be brought to the attention of the Office of the Director of Public Prosecutions, the DPP would generally refer any alleged criminal matters onwards for the consideration of An Garda Síochána. It should be noted that the DPP does not have investigative powers or the power to direct An Garda Síochána to do so. Accordingly, where there is a question of whether there should be an investigation into the commission of a criminal offence, in this case of alleged insurance fraud, it is considered that it should be referred to An Garda Síochána.
Another fundamental consideration is that of differing standards of proof. Where a case is dismissed under the terms of section 26 of the Civil Liability and Courts Act 2004, this is a matter on which the court has been satisfied on the balance of probabilities that false or misleading evidence was intentionally provided. It would be for another court to decide in the context of a criminal trial whether it was satisfied beyond a reasonable doubt that an offence was committed under section 25 or any other relevant provision.
Section 3 of the Bill proposes an amendment to section 29 of the Civil Liability and Courts Act 2004, which deals with offences under Part 2 of the Act. The amendment has the effect of increasing the maximum fine for an offence under the Act from its current level of €3,000 to a class A fine currently set at €5,000.
It should be noted that what is proposed in this Bill contrasts somewhat with the provisions of the Perjury and Related Offences Bill 2018, which was adopted as a Government Bill on 19 November 2019. That Bill is currently awaiting Committee Stage in the Dáil and the Minister, Deputy McEntee, expects the Bill to be enacted later this year. The Bill will provide clear direction to the courts in respect of the necessary penalties to be applied regarding the nature of the offence being prosecuted. The penalties in the Bill are in line with those in the Civil Liability and Courts Act 2004 regarding false evidence and fraudulent claims. The amendment to the 2004 Act proposed in this Bill could, if enacted, create a situation where a person could be liable to different levels of maximum penalty on summary conviction for the same offence.
I should add that in addition to the prosecutions relating to insurance fraud which may be brought under the 2004 Act and under the Perjury and Related Offences Bill upon its enactment, the Government is committed to increasing co-ordination and co-operation between An Garda Síochána and the insurance industry. The Government has also indicated its intention to expand the Garda National Economic Crime Bureau, GNECB, which deals with fraud, and to ensure the relevant fraudulent claims are forwarded to the DPP. In addition, insurance fraud data will be published to allow for detailed analysis in this area with a view to taking the appropriate actions to address any pertinent issues. When the perjury Bill is enacted, it will be a very important measure in countering insurance fraud and the compensation culture and high cost of insurance it fuels.
The legislation to give effect to the recently adopted personal injuries guidelines is currently making its way through the Oireachtas. As shown even by the examples I have given in response to the Bill, these mutually reinforcing measures have a particular focus on the area of insurance fraud and, as such, are strongly intended to augment the original policy objectives of sections 25 and 26 of the Civil Liability and Courts Act 2004.
Along with the Minister, Deputy McEntee, the Tánaiste and Minister for Enterprise, Trade and Employment, the Minister for Finance and the Minister of State at the Department of Finance, Deputy Fleming, who has responsibility for insurance issues, I am very conscious of the issues highlighted in this Bill. However, we need to ensure that any legislation produced in this House is legally robust. I welcome the opportunity to contribute to this debate.